2024 GLOBAL SRM RESEARCH REPORT
ENGAGEMENT SUMMARY OF INSIGHTS
52
53
of respondents battle with other business priorities when seeking engagement to drive supplier management. of Leaders have the buy-in from critical and strategic suppliers to push supplier management initiatives forward. 95% 58% 89% of Leaders obtain 360-degree feedback from critical and strategic suppliers to understand how they are perceived as a customer.
Operational challenges Despite progress in recent years, problematic challenges remain in securing consistent engagement and support from all stakeholder groups. This year, operational teams have shown a notable decline in engagement, with Leaders experiencing a drop from 95% to 74%. This reduction in support underscores the ongoing struggle to balance supplier management with competing business priorities. Senior stakeholders continue to be heavily influenced by other pressing business concerns, as reported by 58% of respondents. Moreover, a lack of awareness of the supplier management value proposition remains a critical barrier (47%). To counter this, organisations must craft a compelling value proposition that not only highlights the tangible benefits but also emphasises the strategic importance of supplier management. For operational stakeholders, the challenge extends beyond awareness. They often question the time and effort required to implement supplier management initiatives, particularly when faced with tight resources and competing priorities. To address this, organisations should focus on quick wins that demonstrate immediate value and shift the business mindset. Celebrating these successes can further elevate the role of procurement and supply chain management within the broader business context. In engaging suppliers, the challenges are similar, with many Followers struggling to see the value in a structured supplier management programme. By implementing these strategies, organisations can ease internal competition for resources and align their teams more effectively around the importance of supplier management, fostering a more collaborative and supportive environment.
What are your biggest barriers preventing engagement across your supplier management programme? 58% Other business priorities
Senior stakeholders Engagement with executive teams over recent years has been strong, with this year being no exception. As organisations continue to navigate supply disruptions and external cost pressures, they increasingly rely on their suppliers to reduce costs (60%) and support risk management (58%). Senior leadership teams recognise the significant value that effective supplier management can unlock, particularly in maintaining supply through strong relationships with critical suppliers. Leaders in this field benefit from substantial support from their senior management teams, with 47% reporting active engagement. Of these, 82% express satisfaction with the value their programmes deliver. In contrast, Followers report much lower satisfaction levels, with only 24% content with their activities. This disparity is likely linked to the lower engagement of senior managers among Followers (31%), who are often preoccupied with other business priorities or struggle to articulate the business case for supplier management. Securing senior or executive engagement is crucial for the success of any supplier management programme. Stakeholders at this level set the strategic direction and play a pivotal role in influencing key supplier relationships, making their support essential for driving tangible benefits and sustaining effective supplier management. Engagement of senior management and executives Leaders Fast Followers Followers Strong and Active Engagement 47% 33% 16% Supportive 47% 56% 48% Neutral 5% 7% 31% Some Opposition 0% 3% 5% Strongly Opposed/Resisting 0%
Insufficient awareness of the value proposition/business case Stakeholders see it as slow to implement and deliver benefits Procurement and supply chain is not high enough on the corporate agenda
47%
26%
25%
Difficulty in creating a compelling business case
Engagement can be seen as a critical foundation for successful supplier management programmes. High levels of engagement across key stakeholder groups including senior management, operational teams, and critical suppliers are essential to driving business continuity and long- term success. Supplier management Leaders have seen significant progress in fostering these relationships, though challenges remain in balancing competing business priorities and communicating supplier management’s value across the organisation. Strengthening supplier engagement is key to maximising the impact that supplier management can bring.
Supply chain complexities underpin the importance of engagement with critical suppliers to drive long-term value and a return on relationship. In recent years, we have observed a consistent level of engagement and support of senior stakeholders across Leaders (96% on average), as they seek to foster stronger, more collaborative relationships with their suppliers. This shift has largely been driven by the need to mitigate supply chain risks and ensure business continuity. However, while Leaders in supplier management have successfully garnered strong support from their senior teams, many Followers still face challenges in securing the same level of commitment (64%), down 5% from last year’s results. This corresponds to the difficulties Followers have had when articulating the value proposition of supplier management to stakeholders, with 52% of Followers experiencing challenges due to stakeholders’ lack of awareness of the business case. Operational stakeholders, particularly those within procurement, continue to play a vital role in promoting supplier relationship management (SRM), with 82% of companies seeing this group as supportive of the supplier management programme. However, there is a need for broader business engagement to maximise its impact. This year only 59% of respondents have positive support from business stakeholders.
Suppliers, particularly those critical and strategic to the business, have shown a growing appetite for structured and collaborative management programmes. The use of 360-degree feedback and other formalised feedback mechanisms has increased, enabling companies to gain deeper insights into how they are perceived by their suppliers. Despite these advancements, many organisations still rely on ad-hoc methods of communication (45%), a reduction of 10% from last year’s results. However, relying on informal conversations can undermine the effectiveness of their supplier engagement efforts. To truly strengthen supplier relationships, it is crucial to move towards more structured and data-driven approaches. While progress has been made, significant challenges remain. One of the most pervasive issues is the competition between supplier management initiatives and other business priorities, up 16% from last year (58%). This challenge is compounded by a lack of awareness and understanding of the supplier management value proposition among senior stakeholders and operational teams. To overcome these obstacles, organisations must make an intensive effort to demonstrate the tangible benefits of supplier management and integrate it more fully into their strategic priorities to boost engagement levels across all stakeholder groups.
18%
No barriers – support is strong across all stakeholder groups Stakeholders disagree with the concept
12%
6% 6%
Lack of supplier support
Critical and strategic suppliers Direct and active engagement with critical and strategic suppliers remains essential for successful supplier management. This year’s findings continue to highlight the importance of collaboration, with a significant percentage of companies reporting high levels of supplier engagement. 97% of Leaders and 95% of Fast Followers indicate strong and active support from their key suppliers, underpinning the value of structured and collaborative management programs. Interestingly, this year also reveals a shift in the level of proactive supplier engagement, with only 14% of Followers actively pushing activities. This is a 50% decline from the previous year. This emphasises the gap between Leaders and Followers, as Leaders consistently demonstrate higher engagement, with 63% reporting robust supplier collaboration. This ongoing trend highlights that while overall engagement is strong, the depth of engagement, particularly in fostering innovation and value creation remains a critical differentiator.
1% 1%
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